Two dads from Newcastle have created an app empire in their spare time without writing a single line of code.

John McCann and Jude Novak, both 34, were among the early hordes pioneering the iPhone app store gold rush, releasing dozens of cheap and cheeky apps such as The Love Calculator, which cost $120 to make but still generates $50 a day in advertising revenue.

INKids founders Jude Novak, left, and John McCann.

They now make high quality apps for children - and all their software has been built by overseas coders they have never met. Mr McCann estimates they've made about half a million dollars from apps in the last few years.

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INKids makes iPhone and iPad apps for children including language app Flashcards (funded by a $90,000 NSW government grant), Futaba Classroom Games, Math Champ and Puzzle Land. Some are free but the full version Flashcards iPad app is $4.49 and the Classroom Games app is $5.49.

“To date we've had around half a million downloads for our Flashcards product alone [including free and paid versions],” said Mr McCann.

Mr McCann, who moved to Newcastle from Sydney after “getting sick of sitting in traffic”, now runs the projects full time but Mr Novak, a designer, still holds down a full-time job.

“Newcastle is a much nicer place to live overall,” said Mr McCann. “You can afford to buy a house here, you don't have to pay for parking when you go to the beach.”

Before INKids, they made about 45 apps in their first year and a half as “developers” but “didn't write a single line of code,” he said.

They hired online “virtual workers” on vWorker.com and managed any full-time staff using the service timedoctor.com.

Today, with INKids, 90 per cent of their work is still farmed out to Russia to developers they now have a relationship with.

“Our entire business model has been made possible in part by the world of outsourcing,” said Mr McCann.

He said the outsourcing was working well for the most part because high quality work was delivered quickly, and because when it is night time here - when the pair do most of their work - it is morning in Russia.

But he said the relationship was trying at times - “particularly when something goes wrong” - and the pair churned through about 20 different developers before finding the right team to work with.

“We couldn't possibly afford to pay ourselves, along with a local developer, so for the time being, this is the model we'll probably stick with, unless we can find someone who wants to work for equity,” said Mr McCann.

Not everyone is so excited about the online outsourcing trend - particularly Australian software makers who charge tens or hundreds of thousands of dollars for work that online freelancers offer to do for a fraction of that amount. Australian app developer b2cloud recently put out a press release saying it had been approached by many businesses asking for help to fix their app that was "botched" by an offshore developer.

Mr Novak and Mr McCann have been working together on a part-time basis since around 2005, when they were building “made for AdSense websites” - information sites about niche topics such as kitchen benchtops, awnings and bathrooms, which have low competition but high value on Google's advertising system.

“I think we made more than half a million dollars out of Adsense over three or four years, and this was something we were doing in our spare time while we were working full time,” said Mr McCann.

Then Mr Novak got an iPhone and the pair immediately realised the potential of the App Store to provide “another means of generating passive income”. They switched completely from making websites to apps and used a similar strategy - finding niche markets with high search volume and little competition.

They started releasing iPad apps in 2010 including The Love Calculator, Cure Acne, Puppy & Dog Trainer and Australian Learner Drivers Test.

Some of the apps were “re-hashed e-books” while others were designed to a higher standard.

Love Calculator alone, one of their only free apps, has had over 1.5 million downloads and at one stage was the second most popular free app on the App Store.

Mr McCann said it had been “dead easy” to make money in the early days of the App Store but “Jude is now embarrassed somewhat to have many of these titles associated with his name”.

They started INKids because they weren't particularly proud of any of the apps they had created and “there was a hollow feeling that lingered in the success we had so far”.

That hollow feeling is fast disappearing. Futaba Classroom Games, made in partnership with a teacher in Japan, is doing well now that US students are back at school. Earlier this month it received an Editor's Choice award from Children's Technology Review.

On their website McCann and Novak recently published an interview with an English teacher in Mongolia who was raving about their iPad apps.

The pair recently showcased their apps at the Tots and Technology conference in the US, and they claim that while their apps are used in hundreds if not thousands of US classrooms, they have yet to gain traction in Australia.

Last week Mr McCann and Mr Novak had discussions with Pearson Education about a partnership, but nothing has been signed off yet.

They believe Newcastle can become a high-tech hub - the city's growing tech scene was recently covered in the Newcastle Herald - and have just set up a co-working space for entrepreneurs called Start House.

Another Australian start-up creating apps for kids is Broccol-E-Games, which recently released the iPad app Maths with Springbird. Founder David Truong, who has had seven years experience in education, moved from Adelaide to Melbourne to build the start-up full time as part of the AngelCube accelerator.

"Lots of people are trying to 'fix' schools and put technology in the classroom, but not many people are trying to compete with Angry Birds for the attention of students," said Truong.

"The vision for the company is to disrupt the way education is delivered, measured and accredited around the world. Similar to what Khan Academy is doing, but for K-12 education."

37 comments

any apps where i can smack my kids or at least electrocute them through the ipad?

Commenter

JoeyJoJoJnr

Location

Court

Date and time

August 28, 2012, 12:36PM

They probably could create one for you, but then they'd just turn around and create an app for DOCS to track sales of the Child Smacker app.

Commenter

AppsGalore

Location

Australia

Date and time

August 28, 2012, 1:04PM

The person who invents the app which lets you reach through your screen and punch someone else in the face will make BILLIONS!

Sadly I don't think many people are currently looking to build apps that cause real world injuries... Maybe a new niche markets with high search volume and little competition exists again for John and Jude... Let's see if outsourced Russian hackers can finally invent the app which will fix the internet!

Commenter

Danomite

Location

Sydney

Date and time

August 28, 2012, 1:21PM

why make billions when you can make.....billions plus a lot, i can see this russian refined app progressing to a stage where kids will be able to smack themselves. It's the perfect crime, a shock collar but for your phone. bids first beta test on my mongo!

Commenter

JoeyJoJoJnr

Location

Boronia Shops

Date and time

August 28, 2012, 1:34PM

'Electrocution' is death by electric shock. I don't think you meant that.

Commenter

Magilla

Location

Ryde

Date and time

August 28, 2012, 4:52PM

At what point does it become exploitation to live off other people's skills? But then again, many successful businesses are built by people who see opportunity and grab it.

Commenter

Knee Jerk

Location

Sydney

Date and time

August 28, 2012, 12:47PM

every single business in the entire world operates on the model where someone provides the skills for someone else. whether that person is directly employed, or a consultant, does it really matter?

the skills that these 2 guys bought overseas, well these developers lacked the ideas that these 2 had, so if they never meet up, the idea never happens.

i'm already looking into vworker, very happy i read this article.

Commenter

matty

Location

melb

Date and time

August 28, 2012, 1:12PM

Knee Jerk...It may interest you to know that over 60% of apps never make enough money to break even on the cost of development. So these overseas developers that you feel are being "exploited", are making a pretty income coding apps for wannabe millionaires that never make a cent of profit with their apps. You are only reading about the successful apps that are making good profit. I have an app that only makes me $50 on a good month. That app cost me $2700 to develop using overseas coders as described in this story. If my app generates the same income every year, it will take me about 5 years just to get back my $2700. Meanwhile, the overseas coders I used will make a fortune during the next 5 years by people like me hiring them to code our app ideas.

It's no different to a normal business really. A business will only hire a worker if the worker will generate more money for the business than their salary. When this doesn't occur, the business either goes broke or downsizes to try to survive.

Commenter

Mo

Date and time

August 29, 2012, 1:12AM

Those numbers in the first few paragraphs don't add up...

"Mr McCann estimates they've made about half a million dollars from apps in the last few years"

then he goes on to say...

"To date we've had around half a million downloads for our Flashcards product alone"

And in the previous sentence it says that Flashcards is not a free app, and that it sells for $4.49. That's a total revenue of $2,245,000, less the 30% fee apple takes leaves $1,571,500 - just off that one app alone! Ok, so there's developer costs etc... but they're outsourcing to russia (because it's so cheap there). It sounds like they're doing a whole lot better than they're letting on. Not that there's anything wrong with that - good on them and keep it up guys. But if that is the case, can we not get the right figures in the article rather than these inconsistencies??

Commenter

stu

Date and time

August 28, 2012, 12:52PM

There are free versions of Flashcards and paid versions. I've clarified in the article now that the $4.49 app is for the full version.